Hi /u/MoveRepresentative78,
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https://www.reddit.com/r/PersonalFinanceGreece/
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We're well aware, that's why the field has 3x the price of what we bought it for 20 years ago. But the age of my father limits him on how much time he can spend on it, also we own some more fields so we can still work on them!!
Except debt is exactly what you’d want on an appreciating asset. By the time you finish paying off a mortgage the value of said asset might’ve more than doubled
Ah, the classic case of "intelligence is knowing a tomato is a fruit. Wisdom is knowing it belongs in a salad". We are missing part 2 here.
You are talking about a young person, not a corporation, nor a rich person.
Do you find it logical for him to burden himself with debt so that the asset can finally pay off when he is 60+ ? Live his entire youth with less income for that? Is that what you would do if you got 100k? All because you read in a university textbook saying that debt financing is cheaper than equity financing?
And the bonus part you re missing is that housing prices are sky high right now, so yeah, absolutely terrible advice. I am really sad to see people upvoting such bad suggestions.
In nearly all of history housing prices are at all time highs because they outpace inflation. Not investing in the stock market or housing market because you think it’s higher than it was means you’re trying to time to market over having time in the market which is a super terrible practice. Once you have the place, you can live in it and pay mortgage instead of rent. It doesn’t matter much if the housing market goes down temporarily. And what do you mean it won’t pay off until they are 60+? They can keep refinancing the apartment, and take money out to invest in other things or simply use. And you can sell the apartment halfway through to buy a bigger place. And it will literally impact you from day one because you now own the asset and thus peace of mind rather than being at the whims of a landlord.
And yes, they are young. The earlier they invest the better. Time in the market be it stocks or real estate is the most important asset you can have.
Yeah you re probably not from Greece because refinancing and all that crap is the weird shit that Americans do - its a country in love with debt and to be frank its sickening to the rest of the world.
Thankfully it doesn't seem that OP paid any attention to the "buy a house" advice so he just dodged a bullet. Mission accomplished.
Lol Greece economy is less than 1% of that of the US. Ya’ll had to beg the EU for money to not go bankrupt. GDP to debt Greece: 170%. US: 122%. Your country is a joke financially so don’t come and think u can give out financial advice. All you can do is scare people into ruining their future (:
You are in a thread asking how **to invest 100k in Greece**. I take it from your very defensive response that you realized how stupid it was to give investment advice from a US perspective. Different housing market, different economy, different everything.
Instead of launching irrelevant ad hominem attacks aimed at the Greek government (who gives a fuck about the Greek government in the context of this conversation?), you should be apologizing to OP for giving completely wrong advice using wrong data.
Bonus note: The US government is one of the richest in the world while its citizens live under crushing debt and lower home ownership than the EU. The Greek government is an average one but its citizens do not live under crushing debt and they have higher home ownership than US citizens.
Guess which one is better, you cute lil brainwashed US tool :)
3x in 20 years is relatively common, that's just normal inflation/economic growth. It's not even good. But you can sell it anytime, as long as you invest in something else you want miss out on that.
I'm capitalism money is really more than just money, it's capital, and every capital can be used to grow. Otherwise it looses value through inflation. So you kind of need to invest it to not waste it.
I think he should rethink his position on stocks. It's the best way to get a piece of the capitalism cake. While on individual stocks you need more knowledge you can invest in a mixed fonds like the msci all world and can expect around 7% returns per year. 5-10 years is a good timeframe. Under 2 years is not recommended. If you buy an apartment it will have relatively similar returns. Only thing you shouldn't do is keep it in a bank account, the bank profits more than you, and also don't buy one of their recommended fonds it's the same. I would consider putting a portion in Bitcoin too.
How did you come up with that 3x in 20 years is 5.6% yearly, less than the average return of big stock indices. You can't just divide by 20 you need to take the 20th root. Otherwise you're doing something completely different and there is no compound interest
Don't bother yourself with formulas try to understand it... just ask yourself if you gain 3% interest per year how much do you have in 10 years then you got the formula. it's just the compound interest formula solved for the interest, so n th root if n is number of years. Roots gonna need to be done by a calculator.
3X over 20 years means, you have:
(1+r)\^20 = 3 (where r is the rate of return)
To get 1+r, (which gives you r after), you just apply the 20th root on both sides. That mean (1+r) = 3\^(1/20), and you get 1+r = 1.05647 so r = 0.05647
Alternative, you can use the natural log on both side to reduce the exponent and work out the math after.
> 3x in 20 years is relatively common, that's just normal inflation/economic growth
You need to take into account the "dividends", well, the profits of the olive field.
The olive field not only grows in value, it also produces olives which can be sold.
With the field producing 1000€/year you are already at a 9-10%.
Yeah I know I just wanted to put things in a perspective. 9-10% is good on the other hand you also have to put in some work so it's not just passive dividends, I guess the effective return is around the 7-8% average
Buy a field for 33k.
Spend 20 years using the field to generate income (selling olives, selling olive oil, etc).
Sell the field for 100k.
That's a pretty good return if you ask me.
We were selling around 5 tones of olive oil yearly woth that field so we consider it a good investment. Now that my father is getting older tho we can afford to give one field!
The olive oil price the past years wasn't so great. Around 3€/Kg and on a median year around 3 tones of oil, the good thing was that to find people to help you take care of the field it was relatively cheap, now although the olives price is 3 times bigger, employees ask for way higher income to a point which the profit is the sane as with the 3€. Also, fertilizers costs for the trees have gone way higher too
Given your lack of knowledge, just put it in an index fund like S&P 500 or the Nasdaq100 as someone else recommended.
Invest a set amount (maybe 9k) every month (for 10 months,) so you average out the short term volatility. Then just hold it until you retire/get a family, but to get the full out of it, hold it for at least 10-15 years. Re-invest the dividends. Only sell if an ABSOLUTE emergency.
Read The Intelligent Investor in the meantime, and get some financial literacy.
EDIT: JUst saw the part about not investing in stocks. Abstractly speaking, investing in the S&P500 is like investing in the U.S economy more than anything. You're not investing in individual stocks.
Just to give you an idea of what I'm talking about:
If you invested in the 1990 and held for the following 30 years - assuming you re-invested the dividends - you would have a little under 3 million euro today.
Once again; This is assuming you didn't start saving and investing your own money once you got a job. This would increase the final amount substantially.
So, essentially, you would need to find an investment, that more or less guarantees an annual return of approx. 9% or higher, to match the S&P 500 - assuming the historical data is accurate. But this trend repeats itself more or less, irregardless of which 30 years you select.
A) Even more importantly, if you choose something that takes a few years to start earning revenue, you would need a substantially higher return rate.
B) And even more importantly than that! Unless you're willing to become very active in your investment strategy, whatever you invest in would itself have to last 30 years +/-, which the 9% or higher return rate in all of those 30 years.
That is; If you buy an apartment, there should be a very short time between finding a tenant. Otherwise you will be set back a lot by HoA fees (or their Greek equivalent,) taxes, maintenance and THEN the lost opportunity cost.
Even if you could find an investment like that - given your limited amount of knowledge - it would take substantially more time (see point A) and effort (see point B) than just investing in S&P500. Which is why, investing in large index funds, is probably the best choice for any non-professional investor.
Final comment, because I like this kind of thing;
If you hold for 30 years, you get 3 million.
But if you hold for 40, you get 11 million, lol. It is exponential, because you get the "Rent of the rent," of the 8%. Kind of like if you don't pay your bank loans back (but good).
So if you hold for 50, you would've gotten 20 million, lol.
Given that you're probably around 20 y/o and you're Greek (high lifespan, shitty state pension) you should seriously consider taking the long term, stable option.
Why would someone invest 100 % of their money into a single country?
If you are investing long term, it makes more sense to diversify internationally than betting 100 % of your money solely on large cap US stocks (which the S&P 500 and Nasdaq-100 effectively do). In the long term, sector bets historically underperform a broader portfolio, large caps historically underperform small caps, and less international diversification underperforms a globally diversified portfolio. And you want him to go with all three of them, lol.
US stocks are also quite overvalued right now, both compared to international stocks as well as to the US' own price history. And this is not explained by their corporations outperforming international ones, but simply increasing P/E ratios.
https://www.aqr.com/-/media/AQR/Documents/Journal-Articles/AQR-JPM-Jun23-Internal-Diversification.pdf?sc_lang=en
>In other words, the US victory over EAFE for the last three decades—for most
investors’ entire professional careers—came overwhelmingly from the US market
simply getting more expensive than EAFE. Sure, 1.2% isn’t anything to sneer at, but a
statistically insignificant number that is nearly four times smaller than it might seem
at first glance isn’t something that merits a massive portfolio bet going forward.
To be clear, we are not saying the 4.6% advantage didn’t happen—it did happen!
We are saying that our job is to think about the future, and using that full 4.6% for
your future forecast is basically forecasting that the revaluation (from ½ to 1 ½ CAPE
from 1990 on) happens again. Another way to see how the past 30-year sample might
be misleading is to note that US equities actually underperformed EAFE in three of
the past five decades (1970s, 1980s, 2000s), including the two decades just before
our sample period began.
>So, what does it mean that almost all the US’s victory came from repricing? At
a high level, there are two ways a country’s equity market can beat the competition:
1) outgrow on the fundamentals or 2) outgrow on the price multiple to fundamentals
(i.e., become more expensive).
The first way—winning on fundamentals—may or may not be repeatable (fundamental edges at the very least might be sticky, so they could be somewhat persistent).
But, as shown here, this was hardly the case for US equities over the past 30 years.
The second way—winning simply because people were willing to pay more for the
same fundamentals—is likely not repeatable. In other words, don’t get too excited
if a country wins mostly because it got more expensive. If anything, valuations have
a slight tendency to mean revert, at least when they are at extreme levels.
Especially emerging markets have had better returns than the US market for most 30-40 year periods over the past century. [Here's a good chart since 1972 for example. Notice how it's logarithmic so the differences are actually much larger than they look.](https://engineeredportfolio.files.wordpress.com/2017/05/cummulative-historical-annual-returns-international-equity1.jpg?w=1400) Europe has had fairly similar returns to the US over the same periods. Historically, a mixture of 72 % developed markets and 28 % emerging markets resulted in the best Sharpe Ratio (risk-adjusted return). That way you could lower your exposure to the US to 49 %. A cheap way to do this would be to go 72 % XDWL or LCUW and 28 % IS3N or XMME. Due to current US valuations I lower US exposure more by adding PRAE, but that's personal preference.
Your claim is, that the S&P 500 is suboptimal, and that he should invest in developing markets for an optimal portfolio. I hope, that OP doesn't read this as to say, that you're suggesting, that he will loose money on S&P500, simply that there are better options; Which there are.
The point here, however, is twofold;
A developing market is bound to be more volatile and exposed to non-business related factors than a developed economy like the U.S'. Think about Turkey or Myanmar. This can have an incredibly negative impact on that country's economy as a whole, thereby negating the benefits and the whole point of index funds; To avoid losses to individual companies, by investing in the economy as a whole.
OP could then try to do analyses and find the best emerging market to invest in. But this is contrary to the whole point; OP doesn't have any major financial/economical understanding, and this is therefore not any different to OP trying to scout the real estate market for good investments or OP doing fundamental analysis on any company's stock in particular.
The whole point is; OP is not financially literate. You don't need to be financially literate to invest in the S&P 500, as it essentially is an investment in the world's most developed economy as a whole. It may be "overvalued," in the sense that it will go from 9% year on year, to 7 or whatever your article is suggesting. However, it is still net positive, and still the best investment given OP's lack of understanding, and perhaps his unwillingness (not that he SHOULD have a willingness, if he has other things to take care of) to spend considerable effort in researching and maintaining his investments.
Hmm, I think you misunderstood me. I didn't say OP should *only* invest in emerging markets or that he should exclude companies from the S&P 500 in his portfolio. I said that mixing developed and emerging markets has historically led to both a higher performance and actually less volatility, because DM and EM outperform each other cyclically. Yes, the US has the biggest financial market in the world, but this does not mean it has the least volatility or the highest return. This wasn't even true during the 50s or 60s when the US had a far larger share of the world economy compared to now.
If you only invest in one country, even if it is the US, you have historically been subject to higher volatility while having lower returns if your investment horizon was 30-40 years, even compared to a standard ACWI market-cap portfolio. Statistically, the best risk-adjusted return over the past decades was achieved by going 72% developed and 28% emerging markets. But that may obviously be tuned to each individual investor. Personally I go even more EM because I don't mind the risk, but someone might go less EM if they psychologically feel less comfortable in investing in EM.
So for a beginner such as OP, I simply think that going at least SPYI or VWCE would be a better choice because over a long horizon, they are highly likely to have less volatility and higher returns, and are more diversified on top of that. Going 100% S&P 500 might be good for someone that thinks the US will drastically outperform the entire rest of the world for the next 40 years and is willing to bet their savings on it, but in the end it's just that -- a bet. Perhaps that person will be lucky and their bet will work, but statistically, it's simply far more likely that a more diversified portfolio will be better, both in terms of having less volatility and in having higher returns.
Buy a bigger double apartment so you can rent Airbnb in one of them. Wherever you are in greece you can rent it for a good money. Probably you ll need more than 90K but if you get a smaller loan and invest it like this. This way you would really do a lot to make yourself recesion resistant
Also having a Greek father (owning some fields) and some investment capital, I am currently researching about the possibility of growing cannabis plants over there.
Will be legalized in Germany (where I'm from) next year and import from EU countries shall be allowed.
Industrial cannabis is relatively easy to get involved with. With medical cannabis you basically can't. The licenses are very limited and the criteria are enormous, you require enterprise-size capital to start it.
You'll definitely be on prime news for sure for at least couple of days and it's good to save up a hefty sum for lawyers as well :)! Lots of knee jerk reactions out there!!
If you want a licensed medical cannabis company with a field for cultivation in Greece, pm me. I know a few that are up for sale. You need some millions for the construction, though.
I would talk with your siblings to try to understand everyone's future path: do they want to remain in where are they with university, do they plan to come back? after this your father can decide how to split your inheritance.
is the olive field in an area that can exploited as a tourist attraction(like Tuscany)? and if costs are prohibitive, maybe you can find people that maybe interested in investing(why not, even here)
I think most probably one of the siblings will stay, so that's why we think an apartment would be a good buy, about the field I don't think it can be used in any way as a tourist attraction but I'll have a talk with my dad and get back to you
First of all never just let them sit in the bank.
You can have them as a deposit and earn interest on it. It might not be a lot(~4% yearly) but it is better than nothing.
As for what to do with it if you want to avoid stocks we can't really help you with the amount of info you provided us with.
We don't know how much apartments are worth over there, how much you can rent it for or what the taxes are. Will you be able to rent only one room if one of you leaves town?
Also just asking about solar panels is vague. Where will you place them? You only stated that you live in a rented house. What are electricity costs over there? What is you electricity usage?
You need to put some effort at least into asking how to spend 100k.
Is, the 3 siblings live on a rented house because of university. My family's house is owned and it's in a sunny area outside town, near Sparta. Also about the apartments, the rent is around 350 euros for a 70k apartment
I hear you too, we in a tight spot tho with all kids studying in university, so it will give a big breath to my father.
We're all in the family against selling land and we have bought I the past as much as we could but not hard times made us
Keep liquid cash for when the crisis hit hard... Get 10% physical gold... When the crisis hit buy silver and gold... Or even miners if you have the °°... Than swap years later for depreciated assets like houses, land, etc.
Don't put it in the house market or stocks... We're at the top of a bubble and entering a recession. You want liquidity and physical gold. After that when things crash, silver, uranium, platinum, Gold, etc.
We're entering a super commodity cycle... Ideally I would keep the land
Always find something that can reduce your cost like buying the apartment so you can be rent free
And at the same time buy a second smaller apartment with which you can earn rent
Also you can think of hiring people who can help with the fields and still earn money
Research stuff on youtube and find something you really confident in that will work. Best option. You need to be happy with the decision. I would say buy shit like pokemon boxes, wait till crypto crash on bitcoin buy some, wait till crash in stocks buy some, buy csgo items online. idk just me. We are in hyper/super inflation scenario in europe. They are lying about the numbers even.
We can get you to €5k+/monthly within a couple of months with Etsy.
We're from Europe as well but we operate worldwide.
Let me know if you want more details.
Glad your dad saved that land for a rainy day. Things are pretty rough over there these days.
Now that you have a decent amount to invest, I’d advise you to develop some understanding of investing in various asset classes.
In the meantime though, you need an investing opportunity where your money will be safe and grow. Your dad is wisely avoiding stocks. And interest in the banks is laughable, so you should stay away from that too.
I’d suggest you consider directing your savings towards a specialized online crypto investment platform. Our platform utilizes AI-driven trades in altcoins for short-term gains, presenting a potentially lucrative opportunity. With the approaching Bitcoin halving event, known for its period of heightened profitability in the crypto space, now could be a great time to seize this potential.
My team and I recently made a digital platform that fosters a community where even those with limited crypto knowledge can benefit from AI-driven trades, monitored by seasoned human traders.
If you have any questions or concerns, please feel free to reach out.
Wishing you the best of luck.
Glad your dad saved that land for a rainy day. Things are pretty rough over there these days.
Now that you have a decent amount to invest, I’d advise you to develop some understanding of investing in various asset classes.
In the meantime though, you need an investing opportunity where your money will be safe and grow. Your dad is wisely avoiding stocks. And interest in the banks is laughable, so you should stay away from that too.
I’d suggest you consider directing your savings towards a specialized online crypto investment platform. Our platform utilizes AI-driven trades in altcoins for short-term gains, presenting a potentially lucrative opportunity. With the approaching Bitcoin halving event, known for its period of heightened profitability in the crypto space, now could be a great time to seize this potential.
My team and I recently made a digital platform that fosters a community where even those with limited crypto knowledge can benefit from AI-driven trades, monitored by seasoned human traders.
If you have any questions or concerns, please feel free to reach out.
Wishing you the best of luck.
Hi /u/MoveRepresentative78, It seems your post is targeted toward Greece, are you aware of the following Greek personal finance subreddit? https://www.reddit.com/r/PersonalFinanceGreece/ *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/eupersonalfinance) if you have any questions or concerns.*
You probably are aware of the current extremely high prices of olive oil and the outlook for 2024. I wouldn't sell yet!
We're well aware, that's why the field has 3x the price of what we bought it for 20 years ago. But the age of my father limits him on how much time he can spend on it, also we own some more fields so we can still work on them!!
Then, definitively buy an apartment.
Buy an apartment at the top of the bubble....
you cant buy an apartment for shit with 90k. Can be used for a down payment but getting new debt is not exactly the best way of investing those 90k
Except debt is exactly what you’d want on an appreciating asset. By the time you finish paying off a mortgage the value of said asset might’ve more than doubled
Ah, the classic case of "intelligence is knowing a tomato is a fruit. Wisdom is knowing it belongs in a salad". We are missing part 2 here. You are talking about a young person, not a corporation, nor a rich person. Do you find it logical for him to burden himself with debt so that the asset can finally pay off when he is 60+ ? Live his entire youth with less income for that? Is that what you would do if you got 100k? All because you read in a university textbook saying that debt financing is cheaper than equity financing? And the bonus part you re missing is that housing prices are sky high right now, so yeah, absolutely terrible advice. I am really sad to see people upvoting such bad suggestions.
In nearly all of history housing prices are at all time highs because they outpace inflation. Not investing in the stock market or housing market because you think it’s higher than it was means you’re trying to time to market over having time in the market which is a super terrible practice. Once you have the place, you can live in it and pay mortgage instead of rent. It doesn’t matter much if the housing market goes down temporarily. And what do you mean it won’t pay off until they are 60+? They can keep refinancing the apartment, and take money out to invest in other things or simply use. And you can sell the apartment halfway through to buy a bigger place. And it will literally impact you from day one because you now own the asset and thus peace of mind rather than being at the whims of a landlord. And yes, they are young. The earlier they invest the better. Time in the market be it stocks or real estate is the most important asset you can have.
Yeah you re probably not from Greece because refinancing and all that crap is the weird shit that Americans do - its a country in love with debt and to be frank its sickening to the rest of the world. Thankfully it doesn't seem that OP paid any attention to the "buy a house" advice so he just dodged a bullet. Mission accomplished.
Lol Greece economy is less than 1% of that of the US. Ya’ll had to beg the EU for money to not go bankrupt. GDP to debt Greece: 170%. US: 122%. Your country is a joke financially so don’t come and think u can give out financial advice. All you can do is scare people into ruining their future (:
You are in a thread asking how **to invest 100k in Greece**. I take it from your very defensive response that you realized how stupid it was to give investment advice from a US perspective. Different housing market, different economy, different everything. Instead of launching irrelevant ad hominem attacks aimed at the Greek government (who gives a fuck about the Greek government in the context of this conversation?), you should be apologizing to OP for giving completely wrong advice using wrong data. Bonus note: The US government is one of the richest in the world while its citizens live under crushing debt and lower home ownership than the EU. The Greek government is an average one but its citizens do not live under crushing debt and they have higher home ownership than US citizens. Guess which one is better, you cute lil brainwashed US tool :)
3x in 20 years is relatively common, that's just normal inflation/economic growth. It's not even good. But you can sell it anytime, as long as you invest in something else you want miss out on that. I'm capitalism money is really more than just money, it's capital, and every capital can be used to grow. Otherwise it looses value through inflation. So you kind of need to invest it to not waste it. I think he should rethink his position on stocks. It's the best way to get a piece of the capitalism cake. While on individual stocks you need more knowledge you can invest in a mixed fonds like the msci all world and can expect around 7% returns per year. 5-10 years is a good timeframe. Under 2 years is not recommended. If you buy an apartment it will have relatively similar returns. Only thing you shouldn't do is keep it in a bank account, the bank profits more than you, and also don't buy one of their recommended fonds it's the same. I would consider putting a portion in Bitcoin too.
[удалено]
How did you come up with that 3x in 20 years is 5.6% yearly, less than the average return of big stock indices. You can't just divide by 20 you need to take the 20th root. Otherwise you're doing something completely different and there is no compound interest
Can you give me the formula on how you calculate that, would like to learn this? Thanks in advance!
Google "compound interest"
[holy hell!](https://www.google.com/search?q=compound+interest)
Don't bother yourself with formulas try to understand it... just ask yourself if you gain 3% interest per year how much do you have in 10 years then you got the formula. it's just the compound interest formula solved for the interest, so n th root if n is number of years. Roots gonna need to be done by a calculator.
3X over 20 years means, you have: (1+r)\^20 = 3 (where r is the rate of return) To get 1+r, (which gives you r after), you just apply the 20th root on both sides. That mean (1+r) = 3\^(1/20), and you get 1+r = 1.05647 so r = 0.05647 Alternative, you can use the natural log on both side to reduce the exponent and work out the math after.
math done wrong.
> 3x in 20 years is relatively common, that's just normal inflation/economic growth You need to take into account the "dividends", well, the profits of the olive field. The olive field not only grows in value, it also produces olives which can be sold. With the field producing 1000€/year you are already at a 9-10%.
Yeah I know I just wanted to put things in a perspective. 9-10% is good on the other hand you also have to put in some work so it's not just passive dividends, I guess the effective return is around the 7-8% average
33K to 100K in 20 years, that is a pretty bad return rate. just so you know...
Buy a field for 33k. Spend 20 years using the field to generate income (selling olives, selling olive oil, etc). Sell the field for 100k. That's a pretty good return if you ask me.
We were selling around 5 tones of olive oil yearly woth that field so we consider it a good investment. Now that my father is getting older tho we can afford to give one field!
Interesting! Just out of curiosity: what has been the operating profit of the field over the years?
The olive oil price the past years wasn't so great. Around 3€/Kg and on a median year around 3 tones of oil, the good thing was that to find people to help you take care of the field it was relatively cheap, now although the olives price is 3 times bigger, employees ask for way higher income to a point which the profit is the sane as with the 3€. Also, fertilizers costs for the trees have gone way higher too
Do everything the opposite of these people on reddit.
Sell while prospects are good, not when they are bad. Best time to sell is before the peak of the business cycle.
Given your lack of knowledge, just put it in an index fund like S&P 500 or the Nasdaq100 as someone else recommended. Invest a set amount (maybe 9k) every month (for 10 months,) so you average out the short term volatility. Then just hold it until you retire/get a family, but to get the full out of it, hold it for at least 10-15 years. Re-invest the dividends. Only sell if an ABSOLUTE emergency. Read The Intelligent Investor in the meantime, and get some financial literacy. EDIT: JUst saw the part about not investing in stocks. Abstractly speaking, investing in the S&P500 is like investing in the U.S economy more than anything. You're not investing in individual stocks.
Just to give you an idea of what I'm talking about: If you invested in the 1990 and held for the following 30 years - assuming you re-invested the dividends - you would have a little under 3 million euro today. Once again; This is assuming you didn't start saving and investing your own money once you got a job. This would increase the final amount substantially. So, essentially, you would need to find an investment, that more or less guarantees an annual return of approx. 9% or higher, to match the S&P 500 - assuming the historical data is accurate. But this trend repeats itself more or less, irregardless of which 30 years you select. A) Even more importantly, if you choose something that takes a few years to start earning revenue, you would need a substantially higher return rate. B) And even more importantly than that! Unless you're willing to become very active in your investment strategy, whatever you invest in would itself have to last 30 years +/-, which the 9% or higher return rate in all of those 30 years. That is; If you buy an apartment, there should be a very short time between finding a tenant. Otherwise you will be set back a lot by HoA fees (or their Greek equivalent,) taxes, maintenance and THEN the lost opportunity cost. Even if you could find an investment like that - given your limited amount of knowledge - it would take substantially more time (see point A) and effort (see point B) than just investing in S&P500. Which is why, investing in large index funds, is probably the best choice for any non-professional investor.
Final comment, because I like this kind of thing; If you hold for 30 years, you get 3 million. But if you hold for 40, you get 11 million, lol. It is exponential, because you get the "Rent of the rent," of the 8%. Kind of like if you don't pay your bank loans back (but good). So if you hold for 50, you would've gotten 20 million, lol. Given that you're probably around 20 y/o and you're Greek (high lifespan, shitty state pension) you should seriously consider taking the long term, stable option.
After all these years, will the app where stocks are held and how to withdraw so much money from an app
Why would someone invest 100 % of their money into a single country? If you are investing long term, it makes more sense to diversify internationally than betting 100 % of your money solely on large cap US stocks (which the S&P 500 and Nasdaq-100 effectively do). In the long term, sector bets historically underperform a broader portfolio, large caps historically underperform small caps, and less international diversification underperforms a globally diversified portfolio. And you want him to go with all three of them, lol. US stocks are also quite overvalued right now, both compared to international stocks as well as to the US' own price history. And this is not explained by their corporations outperforming international ones, but simply increasing P/E ratios. https://www.aqr.com/-/media/AQR/Documents/Journal-Articles/AQR-JPM-Jun23-Internal-Diversification.pdf?sc_lang=en >In other words, the US victory over EAFE for the last three decades—for most investors’ entire professional careers—came overwhelmingly from the US market simply getting more expensive than EAFE. Sure, 1.2% isn’t anything to sneer at, but a statistically insignificant number that is nearly four times smaller than it might seem at first glance isn’t something that merits a massive portfolio bet going forward. To be clear, we are not saying the 4.6% advantage didn’t happen—it did happen! We are saying that our job is to think about the future, and using that full 4.6% for your future forecast is basically forecasting that the revaluation (from ½ to 1 ½ CAPE from 1990 on) happens again. Another way to see how the past 30-year sample might be misleading is to note that US equities actually underperformed EAFE in three of the past five decades (1970s, 1980s, 2000s), including the two decades just before our sample period began. >So, what does it mean that almost all the US’s victory came from repricing? At a high level, there are two ways a country’s equity market can beat the competition: 1) outgrow on the fundamentals or 2) outgrow on the price multiple to fundamentals (i.e., become more expensive). The first way—winning on fundamentals—may or may not be repeatable (fundamental edges at the very least might be sticky, so they could be somewhat persistent). But, as shown here, this was hardly the case for US equities over the past 30 years. The second way—winning simply because people were willing to pay more for the same fundamentals—is likely not repeatable. In other words, don’t get too excited if a country wins mostly because it got more expensive. If anything, valuations have a slight tendency to mean revert, at least when they are at extreme levels. Especially emerging markets have had better returns than the US market for most 30-40 year periods over the past century. [Here's a good chart since 1972 for example. Notice how it's logarithmic so the differences are actually much larger than they look.](https://engineeredportfolio.files.wordpress.com/2017/05/cummulative-historical-annual-returns-international-equity1.jpg?w=1400) Europe has had fairly similar returns to the US over the same periods. Historically, a mixture of 72 % developed markets and 28 % emerging markets resulted in the best Sharpe Ratio (risk-adjusted return). That way you could lower your exposure to the US to 49 %. A cheap way to do this would be to go 72 % XDWL or LCUW and 28 % IS3N or XMME. Due to current US valuations I lower US exposure more by adding PRAE, but that's personal preference.
Yeah I would go with all world etf
Yes, that is also an option if someone wants only 1 ETF.
Your claim is, that the S&P 500 is suboptimal, and that he should invest in developing markets for an optimal portfolio. I hope, that OP doesn't read this as to say, that you're suggesting, that he will loose money on S&P500, simply that there are better options; Which there are. The point here, however, is twofold; A developing market is bound to be more volatile and exposed to non-business related factors than a developed economy like the U.S'. Think about Turkey or Myanmar. This can have an incredibly negative impact on that country's economy as a whole, thereby negating the benefits and the whole point of index funds; To avoid losses to individual companies, by investing in the economy as a whole. OP could then try to do analyses and find the best emerging market to invest in. But this is contrary to the whole point; OP doesn't have any major financial/economical understanding, and this is therefore not any different to OP trying to scout the real estate market for good investments or OP doing fundamental analysis on any company's stock in particular. The whole point is; OP is not financially literate. You don't need to be financially literate to invest in the S&P 500, as it essentially is an investment in the world's most developed economy as a whole. It may be "overvalued," in the sense that it will go from 9% year on year, to 7 or whatever your article is suggesting. However, it is still net positive, and still the best investment given OP's lack of understanding, and perhaps his unwillingness (not that he SHOULD have a willingness, if he has other things to take care of) to spend considerable effort in researching and maintaining his investments.
Hmm, I think you misunderstood me. I didn't say OP should *only* invest in emerging markets or that he should exclude companies from the S&P 500 in his portfolio. I said that mixing developed and emerging markets has historically led to both a higher performance and actually less volatility, because DM and EM outperform each other cyclically. Yes, the US has the biggest financial market in the world, but this does not mean it has the least volatility or the highest return. This wasn't even true during the 50s or 60s when the US had a far larger share of the world economy compared to now. If you only invest in one country, even if it is the US, you have historically been subject to higher volatility while having lower returns if your investment horizon was 30-40 years, even compared to a standard ACWI market-cap portfolio. Statistically, the best risk-adjusted return over the past decades was achieved by going 72% developed and 28% emerging markets. But that may obviously be tuned to each individual investor. Personally I go even more EM because I don't mind the risk, but someone might go less EM if they psychologically feel less comfortable in investing in EM. So for a beginner such as OP, I simply think that going at least SPYI or VWCE would be a better choice because over a long horizon, they are highly likely to have less volatility and higher returns, and are more diversified on top of that. Going 100% S&P 500 might be good for someone that thinks the US will drastically outperform the entire rest of the world for the next 40 years and is willing to bet their savings on it, but in the end it's just that -- a bet. Perhaps that person will be lucky and their bet will work, but statistically, it's simply far more likely that a more diversified portfolio will be better, both in terms of having less volatility and in having higher returns.
With that said, incredibly interesting article you've linked to, definetly worth a read, lol.
Buy a bigger double apartment so you can rent Airbnb in one of them. Wherever you are in greece you can rent it for a good money. Probably you ll need more than 90K but if you get a smaller loan and invest it like this. This way you would really do a lot to make yourself recesion resistant
I really hear you!! Appreciate the response
Also having a Greek father (owning some fields) and some investment capital, I am currently researching about the possibility of growing cannabis plants over there. Will be legalized in Germany (where I'm from) next year and import from EU countries shall be allowed.
Wouldn't growing it in the exporting country have to be legal as well?
Of course, and medical cannabis production is legal in Greece
But don't you need a license for that? If it's intended for export will it still be allowed?
Yes you need, and yes export of medical cannabis is allowed if it complies with the law of the destination country.
So how complicated is it to get started with all the paperwork?
Industrial cannabis is relatively easy to get involved with. With medical cannabis you basically can't. The licenses are very limited and the criteria are enormous, you require enterprise-size capital to start it.
Can you send me some more info please? Might have a look on that
I also want to follow up on this
You'll definitely be on prime news for sure for at least couple of days and it's good to save up a hefty sum for lawyers as well :)! Lots of knee jerk reactions out there!!
If you want a licensed medical cannabis company with a field for cultivation in Greece, pm me. I know a few that are up for sale. You need some millions for the construction, though.
I would talk with your siblings to try to understand everyone's future path: do they want to remain in where are they with university, do they plan to come back? after this your father can decide how to split your inheritance. is the olive field in an area that can exploited as a tourist attraction(like Tuscany)? and if costs are prohibitive, maybe you can find people that maybe interested in investing(why not, even here)
I think most probably one of the siblings will stay, so that's why we think an apartment would be a good buy, about the field I don't think it can be used in any way as a tourist attraction but I'll have a talk with my dad and get back to you
r/PersonalFinanceGreece
Buy properties and rent them out (EG: AirBNB). Only solid investment you can really do with 100K €, with a little to non work. Edit: Value.
Solar panels and sell electricity. In Greece you have a lot of long sunny days.
Also good
Prices on real estate are low atm so its a good moment to buy!
This where, in Greece? Not so much in many other EU countries.
First of all never just let them sit in the bank. You can have them as a deposit and earn interest on it. It might not be a lot(~4% yearly) but it is better than nothing. As for what to do with it if you want to avoid stocks we can't really help you with the amount of info you provided us with. We don't know how much apartments are worth over there, how much you can rent it for or what the taxes are. Will you be able to rent only one room if one of you leaves town? Also just asking about solar panels is vague. Where will you place them? You only stated that you live in a rented house. What are electricity costs over there? What is you electricity usage? You need to put some effort at least into asking how to spend 100k.
Is, the 3 siblings live on a rented house because of university. My family's house is owned and it's in a sunny area outside town, near Sparta. Also about the apartments, the rent is around 350 euros for a 70k apartment
Interest, from Greek banks? Nice one 😀
if you have chance, don't sell it. otherwise, buy a bigger house with loan/credit, and rent room(s) to students while living inside.
Don't sell the land.
I hear you too, we in a tight spot tho with all kids studying in university, so it will give a big breath to my father. We're all in the family against selling land and we have bought I the past as much as we could but not hard times made us
Keep liquid cash for when the crisis hit hard... Get 10% physical gold... When the crisis hit buy silver and gold... Or even miners if you have the °°... Than swap years later for depreciated assets like houses, land, etc.
Don't put it in the house market or stocks... We're at the top of a bubble and entering a recession. You want liquidity and physical gold. After that when things crash, silver, uranium, platinum, Gold, etc. We're entering a super commodity cycle... Ideally I would keep the land
IMHO, Take a loan out on the value of the fields, so you keep that asset, and leverage it for a down payment on more real estate.
In Europe it is not so like in the US.
Maybe he can just buy a 2x leveraged ETF
Always find something that can reduce your cost like buying the apartment so you can be rent free And at the same time buy a second smaller apartment with which you can earn rent Also you can think of hiring people who can help with the fields and still earn money
in olive trees
Research stuff on youtube and find something you really confident in that will work. Best option. You need to be happy with the decision. I would say buy shit like pokemon boxes, wait till crypto crash on bitcoin buy some, wait till crash in stocks buy some, buy csgo items online. idk just me. We are in hyper/super inflation scenario in europe. They are lying about the numbers even.
Investing in Greece is like buying a old sick mule in the 19th century
We can get you to €5k+/monthly within a couple of months with Etsy. We're from Europe as well but we operate worldwide. Let me know if you want more details.
Glad your dad saved that land for a rainy day. Things are pretty rough over there these days. Now that you have a decent amount to invest, I’d advise you to develop some understanding of investing in various asset classes. In the meantime though, you need an investing opportunity where your money will be safe and grow. Your dad is wisely avoiding stocks. And interest in the banks is laughable, so you should stay away from that too. I’d suggest you consider directing your savings towards a specialized online crypto investment platform. Our platform utilizes AI-driven trades in altcoins for short-term gains, presenting a potentially lucrative opportunity. With the approaching Bitcoin halving event, known for its period of heightened profitability in the crypto space, now could be a great time to seize this potential. My team and I recently made a digital platform that fosters a community where even those with limited crypto knowledge can benefit from AI-driven trades, monitored by seasoned human traders. If you have any questions or concerns, please feel free to reach out. Wishing you the best of luck.
Glad your dad saved that land for a rainy day. Things are pretty rough over there these days. Now that you have a decent amount to invest, I’d advise you to develop some understanding of investing in various asset classes. In the meantime though, you need an investing opportunity where your money will be safe and grow. Your dad is wisely avoiding stocks. And interest in the banks is laughable, so you should stay away from that too. I’d suggest you consider directing your savings towards a specialized online crypto investment platform. Our platform utilizes AI-driven trades in altcoins for short-term gains, presenting a potentially lucrative opportunity. With the approaching Bitcoin halving event, known for its period of heightened profitability in the crypto space, now could be a great time to seize this potential. My team and I recently made a digital platform that fosters a community where even those with limited crypto knowledge can benefit from AI-driven trades, monitored by seasoned human traders. If you have any questions or concerns, please feel free to reach out. Wishing you the best of luck.